Belarus’ Finance Ministry Concerned About Growth Of Expenses For State Debt Servicing

The expenses of the budget for servicing the public debt increased five-fold.

The Ministry of Finance of Belarus is concerned about the growth of the public debt servicing expenses. According to the Ministry of Finance, in 2010-2016, the budget expenditures (as a percentage of the GDP) for servicing the public debt increased five-fold.

"The increase of the scope of debt inevitably leads to an increase in the costs of its servicing, increasing the burden on the budget. The share of these payments in the volume of expenditures of the republican budget in 2016 was more than 10%, while in 2010 - about 2%," — stated in the materials of the expanded board of the Ministry of Finance, published in the March issue of the departmental journal "Finance, Accounting, Audit ".

The specialists of the main department of the budget policy of the Ministry of Finance state that the public debt has been increased in the recent years to solve the problems that arised in the corporate sector. "Solving financial problems of the real sector of the economy by the debt sources was widely used in 2015-2016," — the Finance Ministry has said.

However, according to the specialists, "such mechanism should be regarded as a temporary and exceptional measure." Practice shows that such measures "did not solve the problems of state enterprises, but only postponed them, in most cases."

For example, in 2016 more than Br 2 billion was allocated from the consolidated budget to stabilize the activities of the agricultural organizations. "It is important that budgetary investments should lead to stabilization and resolution of systemic problems in the agricultural sector. However, the size of the accumulated debt of the organizations of the agricultural-industrial complex on preferential loans has remained unchanged (Br 3,7 billion) for the last three years, and debts to the budget are growing, " — the Finance Ministry has said.

Moreover, the tendency of growing of the enterprises' debts to the budget for loans attracted from the Chinese banks to implement investment projects, is escalating. In 2016, the arrears doubled and amounted to more than $ 318 million, $ 36 million of which were the overdue debts.